What prospects for a wto deal in bali

What prospects for a wto deal in bali

What if the Bali Ministerial Conference achieve?

The WTO Doha Development Round premiered in December 2001 to boost the international trading system by further lowering trade barriers and by revising certain trade rules. Projections using computable general equilibrium models claim that a thorough Doha deal would bring world income gains more than $280 billion, with notable gains for Parts of asia (Hufbauer, Schott, and Wong 2010). The ambitious work program covered around 20 regions of trade, and negotiations made progress until December 2008, when the trade talks stalled over a discord between your US and India over agriculture (Bhagwati and Sutherland 2011, Baldwin and Evenett 2011). Since that time, interest among WTO members in the multilateral route for trade liberalisation has gradually waned. Many countries – including some in Asia – thought we would sign regional trade agreements to lessen trade barriers and improve trade rules (Plummer 2012).

After unsuccessful attempts to re-launch the negotiations at the WTO Ministerial Conferences in ’09 2009 and 2011, the meeting in Bali represents another possibility to bring WTO members back again to the negotiation table. The brand new WTO Director-General Roberto Azevedo may provide fresh impetus – convincing Members that multilateral trade liberalisation isn’t just your best option, but also remains doable. In the most optimistic scenario, the Bali Conference would thus be the starting place for renewed interest in the Doha Round, and mark a restarting of multilateral trade negotiations (Banerjee 2013).

What might the Bali Ministerial Conference achieve?

Current negotiations in Geneva to get ready for the Bali Conference are intense, and WTO Members are apparently converging around three key deliverables for Bali:

  • First, the G20 band of developing countries has made a proposal to improve the tariff-quota administration.

The essential idea is to change the rules about how exactly quotas could be distributed, as a way to avoid the allocation method from constituting a trade barrier. An agreement would thus increase transparency and facilitate market access for quota-restricted products. At the moment, there can be an apparent consensus among WTO Members around the problem of improving information-sharing. However, there is ongoing debate about how exactly disciplines ought to be tightened, and what type of special treatment ought to be granted for developing countries.

  • The next key deliverable for Bali is trade facilitation.

Pushed hard by developed countries – especially the united states and EU – the written text is aimed at accelerating cross-border trade entries by increasing transparency, harmonising customs procedures, and improving trade infrastructure. The primary sticking point is on how best to balance the obligations of developing countries and the assistance granted to them. In this context, at the annual IMF/World Bank meetings in Washington in mid-October 2013, the IMF, the World Bank and the regional development banks (like the Asian Development Bank) announced that they might cooperate with the WTO to ensure developing countries would receive assist with meet up with the new trade facilitation commitments.

  • The 3rd issue that is in the centre of the existing negotiations in Geneva is a proposal introduced by the G33 band of developing countries on stock holdings for food security.

The proposal shows that governments in developing countries will be permitted to purchase unlimited food at government-set prices (not market prices) with the aim of stocking it for food security purposes, without this being regarded as trade-distorting domestic support. The strongest supporters of the proposal are large Parts of asia – namely China, India, and the Philippines – which all have food security schemes set up for the poor. Because it is apparently difficult to acknowledge amending the Agreement on Agriculture by December, WTO members lean towards agreeing on a so-called peace clause, which would give developing countries a temporary waiver from being challenged beneath the Agreement.

What does this possible outcome mean for Asia?

Agreeing on the above-listed deliverables at Bali will probably reduce trade barriers and improve trade prospects for Parts of asia. It really is, however, difficult to predict the type and magnitude of the improvements.

The first two issues – namely a reform of the quota administration and trade facilitation – should help facilitate trade in Asia. However, several caveats should be raised. First, only a part of trade in your community is at the mercy of quotas. Furthermore, the agreement wouldn’t normally abolish existing quotas, but simply make their administration more transparent and less burdensome.

In relation to trade facilitation, several developing Parts of asia curently have highly efficient customs. In the 2012 World Bank trade logistics performance index, six out from the top 30 performers were developing Asian economies – namely China, South Korea, Malaysia, Singapore, Hong Kong, and Taipei. Trade facilitation might therefore become more very important to lower-income countries in Asia. The Bali package would reinforce existing efforts at the national and regional level to streamline customs and reduce red tape. The results on trade will most likely not materialise immediately, but instead in the medium-run. The primary winners would be the lower-income countries all over the world.

The trade aftereffect of the 3rd deliverable – namely introducing a waiver for disciplines on stock holdings for food security – is highly uncertain. Price-setting by governments and subsequent food stocking carries the chance of seriously distorting markets. In Asia, the primary staple food that switches into food stocks is rice. Given how big is the rice market in Parts of asia that may have recourse to the newly granted flexibilities, the rice market in your community might become heavily disrupted. This outcome would run counter to the original notion of the Doha Development Agenda to produce a more open, stable, and predictable trading environment.

Assessing post-Bali prospects

Even if the trade ramifications of the three deliverables only take effect in the medium- or long-run, agreeing on a little package in Bali would send the important signal a multilateral agreement continues to be possible. It could thereby give a strong incentive to resume negotiations of key elements of the Doha Development Agenda. Countries may thus redeploy their negotiation capacity from bilateral negotiations to the multilateral table.

The chance remains high, however, that no agreement will be reached at Bali, and that it’ll join the long set of failed Ministerial Conferences. Reflecting this scepticism, key WTO members appear to be opting to liberalise trade by negotiating so-called mega-regional trade agreements – like the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership agreement, the Regional Comprehensive Economic Partnership, and the Pacific Alliance (Baldwin, Kawai, and Wignaraja 2013). The appealing option of mega-regionals raises doubts if the deliverables described above provide sufficient incentives to forge a deal in Bali. Large countries may be unwilling to compromise, which is always to the detriment of countries that aren’t part of mega-regionals.

Hope hasn’t fully vanished that the WTO Doha Round could be concluded, and neither has humour. Trade negotiators have often joked about ‘Doha ha ha’. Why don’t we hope that the 9th Ministerial Conference in Bali will never be remembered as ‘Bali(st) said, soonest mended.’

Disclaimer: The views expressed listed below are those of the authors , nor necessarily represent those of the institutions with that they are affiliated.


Baldwin, R and S Evenett (2011) (eds.), Why World Leaders Must Resist the False Promise of Another Doha Delay, London: CEPR.

Baldwin, R, M Kawai, and G Wignaraja (2013) (eds.), The continuing future of the World Trading System: Asian Perspectives, London: CEPR and ADBI.

Banerjee, C (2013), “WTO Bali Conference: A fresh expect Doha Round”, The Economic Times, 7 October.

Bhagwati, J and P Sutherland (2011), “The Doha Round Setting a Deadline, Defining your final Deal”, Final Report of the Higher level Trade Expert Group.

Hufbauer, Schott, and Wong (2010), “DETERMINING the Doha Round”, Policy Analyses in International Economics 91, Peterson Institute for International Economics.

Plummer, M (2012), “The Emerging Post-Doha Agenda and the brand new Regionalism in the Asia-Pacific”, ADBI Working Paper No. 384, Asian Development Bank Institute.

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